Back
Karnataka High Court
Systems Manufacturing Ltd - Appellant
Versus
Systems Employees Association - Respondent
Decided On : 12-14-00
W.A. : 3598 of 1999
SETTLEMENT - Industrial Disputes - Section 25-FFA of the Industrial Disputes Act, 1947 - Section 2 (p) of the Act - Section 18 of the Act
Fact of the Case:
The factory was closed down by the management, and a settlement was reached between the workmen and the management, which severed the employer-employee relationship. The State Government referred a dispute to the Industrial Tribunal regarding the closure and reinstatement of the workmen.
Finding of the Court:
The court found that the closure was bona fide and that the workmen were not entitled to reinstatement or back wages. The court quashed the impugned award and set aside the order passed by the learned single Judge.
Issues: The issues revolved around the bona fide nature of the closure, entitlement to reinstatement and back wages, and the binding effect of the settlement between the parties.
Ratio Decidendi: The court held that the settlement between the parties, which severed the employer-employee relationship, was binding as per Section 18 of the Act. It also found that the workmen had waived their right to seek re-employment in the settlement, and therefore, were not entitled to reinstatement or back wages.
Final Decision: The court quashed the impugned award and set aside the order passed by the learned single Judge. The Writ Appeal filed by the management was allowed, and the Writ Appeal filed by the workmen was dismissed.
( 1 ) BOTH the workmen and the management have preferred these two writ appeals against the common order passed by the learned single judge in two writ petitions filed independently by them against the award of the Industrial tribunal, Bangalore, in I. D. No. 27/1990 (Annexure-A ). FACTS
( 2 ) IN the year 1971, Systems manufacturing Limited had established a factory in Peenya Industrial Area, Bangalore, for manufacture of material handling equipment. For various reasons, reasonableness or legality whereof need not be gone into for the present, the workmen of the said factory went on strike from January 23, 1984. According to the Management the workmen also indulged in various acts of indiscipline during the strike like obstruction of entry into and exit out of the factory premises, prevention of despatches of factory goods, etc.
( 3 ) ACCORDING to the Management, all possible efforts were made to persuade the workmen to resume work but it was all in vain. Ultimately, the Management closed down the factory with effect from May 2, 1984 and consequently terminated the services of all the workmen after giving notice in terms of Section 25-FFA of the Industrial Disputes Act, 1947 (in short the 'act') and offering closure compensation to them.
( 4 ) SUBSEQUENT to the above legal steps taken by the Management, the contesting parties sat across the table in order to work out a mutual agreement in order to avoid any future litigation with regard to their relationship, rights and obligations. Ultimately, they arrived at a settlement, which was recorded in writing on September 8, 1984 and signed by all the 52 workmen working on the date of closure of the factory and representative of the management. Copy of the Memorandum of Settlement has been filed as Annexure A.
( 5 ) THE Memorandum of Settlement, after setting out the brief narration of the facts, which had led to the closure of the factory, the circumstances and the purpose of arriving at the settlement, has spelt out the terms thereof. The material terms of the present purposes are reproduced hereunder. These are, terms OF SETTLEMENT (I) It is agreed that the 52 workmen whose names are shown in Annexure to this settlement by virtue of their not resigning voluntarily will be paid their legal compensation like 15 days' pay for every completed year of service along with all other dues like leave wages, earned wages, overtime wages, notice pay, bonus, gratuity etc. if eligible as per law in this regard. (II) It is further agreed that in addition to the abovementioned legal compensation, an amount equivalent to one month's wages for every year of completed service will be paid as ex-gratia payment in full and final settlement of all the claims of the Union and workmen, including the claim for re-employment, if and, when, the unit is re-opened in any manner. (III) The Union and workmen have agreed to receive the amounts mentioned in clauses (i) and (ii) above, in full and final settlement of all their claims including reinstatement, closure compensations, earned wages. leave wages, bonus, gratuity, overtime payment, service compensation, notice pay, etc. and they will have no other claim whatsoever against the management. (IX) It is further understood that by receiving the compensation as well as the ex-gratia amounts mentioned in clauses (i) and (ii) above, the employer-employee relations will cease and workmen will have no claim for re-employment or for any compensation against this company. (X) Consequent to this Settlement, the management will be free to shift any machinery from the present place to any other premises or to start any manufacturing activities temporarily till the present premises is handed to the buyer who has already finalised the deal.
( 6 ) IT is not in dispute that the workmen, who are before us, were party to the Settlement and had received their statutory compensation as well as the ex-gratia payments as per the settlement at Annexure 'a'. There
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
